Does economic growth positively affect income inequality in China?

Xun Ding, Tian Dong, Yanjie Xu, Zhi Zheng

Abstract

This report focuses on the relationship between the economic growth and income inequality in China. The hypothesis is that economic growth led to an increase in income inequality in China. The alternative hypothesis is that economic growth led to a decrease in income inequality in China. After analysing GDP per capita and the GINI index from World Bank, the results show a positive relationship between economic growth and income inequality. Additionally, this report also would measure the influence of monopoly power and the disposable income of urban/rural households to further support the hypothesis.